7936567 Canada Inc SWYDF

RE:RE:RE:RE:RE:RE:Deadline on Pikoo backin

[mjl777]

Stornoway's executive management and board of directors could have easily anticipated that cash would be at a premium. That being the case, why did they negotiate a one-sided option agreement that required an additional cash investment on Stornoway's part (to back-in to 40%)? It's not as if North Arrow had any leverage over Stornoway. They needed the properties to survive. In their absence, they were toast. Irrelevant! So why not a 60/40 split out of the gate, instead of 80/20? Or better yet, 51/49 or 40/60? 

According to Stornoway, it needed a catalyst for stock price appreciation. But, if that's really true, why was the deal structure not even remotely aligned with the company's own corporate objectives? Why wasn't the deal structured to mitigate the impact on Stornoway's future liquidity?  

The fact that these exceptional properties were conveyed to another entity for nothing makes me cringe. Is there no legitimate oversight in this corporation? What is the board doing? Circumstances such as these creates the perception that the company is attempting to destroy shareholder value, rather than create it. Creates the perception that things are being arranged so that the spoils associated with Renard and the company's other assets will accrue to other parties. It also goes a long way towards explaining Stornoway's inability to raise project financing for Renard on favourable terms. If you don't have cash flow, all you have to fall back on is credibility. Stornoway appears to be lacking this in spades and what's more, their arrogance appears to have no bounds.